Worth reprinting from his email…..

RICHARD RIDER RANT 10 May, 2007:  Today at Von’s I paid a record price for my usual purchase of two one-gallon containers of skim milk.  An even $5.00.  As perhaps you recall from a previous rant, I prefer buying two one-gallon milks at a time because of the considerable discount — given that a single gallon of the same milk sells at Von’s for about $4.00 (the $4 one gallon artificially high unit price is thanks to our peculiar state milk regulations).
 
Recently I’ve been surprised with how fast our local milk prices have climbed, so I decided to do a little research. 
 
As I’ve reported before, both the federal government and the California state government dairy regulators hold milk prices artificially high through complex, totally incomprehensible milk floor price requirements.  This is 100% to benefit the dairies and the milk processors — NOT for the benefit for the consumers.
 
Many states don’t have the state regulation (and thus have much lower single gallon milk prices).  But in California we are blessed with benevolent government protecting us from the vagaries of the marketplace.  Thanks a bunch, California!
 
Interestingly, since the turn of the millennium, California milk prices, while variable, have not climbed appreciably.  They are high relative to what the free market price would be and the price in other Western states without milk price fixing, but at least our milk prices have gone appreciably higher.  Until the last few months.
 
Since December 2006 to now (May, 2007) the cost of my two skim milk purchase has shot up an astonishing 52%!!!  While whole milk has not risen as rapidly as skim milk, it has also experienced a dramatic run-up. 
 
And this in spite of rapidly growing milk production numbers.  It appears that nationwide milk production is up about 7% from a year ago, and has been steadily increasing for years.  And, since California is now easily the largest milk producer of the 50 states, it’s not a big transportation problem getting our state produced milk to a dairy processor and then delivered to the local markets.
 
So, bottom line, what caused the price surge?  Government drove the price up.  PERIOD! 
 
And, I must say, special credit is due to our wonderful Democrat U.S. Senator, Dianne Feinstein.  Let me tell you how it happened.
 
Last year a federal bill passed, the typically misnamed Milk Regulatory Equity Act of 2005.  I reported on it then. 
 
The major goal of the bill was quite specific — to crush independent Arizona milk producer Hein Hettinga.  The details can be found in the WASHINGTON POST article below, but the bottom line is that this dairyman was selling milk in California 20 cents a gallon cheaper than the protected dairies in the state, benefiting consumers.
 
Feinstein reveled in the passage of the anti-Hettinga bill she co-authored, sending out a press release claiming that the bill’s passage was a great victory for California against "outside interests" — you know, evil businessmen in Arizona who provide a desired product at a better price.
 
Well, to mix farm animals, the chickens have come home to roost.  While milk prices are on now on the rise nationwide, our California prices are rising significantly faster since Hettinga is no longer selling inexpensive milk in California.  Adjusting for the other variables, it seems clear that the CA extraordinary increase is directly connected to Feinstein and the other U.S. Senators and Congress reps who supported this bill.
 
I might add that, while the Democrat leadership seemed to take point on passing this bill, a higher percentage of our AWFUL current crop of GOP federal politicians voted for it than did Democrats!  I have the info on this which I sent out before (courtesy of NTU), in case anyone is interested.
 
I’ll also include a couple other interesting links on the story below.
 
But let’s come back to a point I mentioned only in passing — milk prices nationwide are trending up at an accelerating pace and this is expected to continue. 
 
For this we can thank the geniuses who think that ethanol is the magic bullet to end our oil dependence.  This dumb idea is wrong for so many, many reasons, but additional unintended consequences are starting to emerge.  Using our corn crop to make ethanol (producing no net energy, according to studies) has driven up the price of corn — practically doubled it in the last couple of years. 
 
So guess what dairy cows eat?  Maize, as the natives used to say.  See the CNN Money article below for more details on how the ethanol craze is going to cost us in some many ways we never considered.

http://www.keepmilkpriceslow.org/index.htm

This entry was posted on Friday, May 11th, 2007 at 12:00 am and is filed under Blog Posts.